199 F.3d 672 (3rd Cir.

1999)

UNITED STATES OF AMERICA,

v.
JAMES J. ZWICK, Appellant
UNITED STATES COURT OF APPEALS FOR THE THIRD
CIRCUIT
No. 98-3641
Argued: July 15, 1999
Filed December 15, 1999

On Appeal from the United States District Court for the Western District
of Pennsylvania (Criminal Action No. 97-cr-00182-1) (District Judge: The
Honorable William L. Standish)[Copyrighted Material Omitted]
[Copyrighted Material Omitted]
SHELLEY STARK, Esquire, [ARGUED], Office of Federal Public
Defender 960 Penn Avenue, 415 Convention Tower, Pittsburgh, PA
15222, Counsel for Appellant
ROBERT S. CESSAR, ESQUIRE, [ARGUED], Office of U.S. Attorney,
633 U.S. Post Office & Courthouse, Pittsburgh, PA 15219, Counsel for
Appellee
Before: ROTH, RENDELL, Circuit Judges, and POLLAK, * District Judge
OPINION OF THE COURT
RENDELL, Circuit Judge.

In this appeal, we are asked to construe 18 U.S.C. S 666, a criminal provision

entitled "Theft or bribery concerning programs receiving Federal funds" ("the
Act" or "the statute"). Appellant James J. Zwick claims that the District Court
misinterpreted the statute when it upheld his three- count conviction for bribery
under S 666(a)(1)(B) without proof of a connection between the offense
conduct and federal funds or programming. We conclude that the District Court
erred in interpreting the statute in this respect and will therefore remand for
further proceedings consistent with this opinion. Zwick also challenges the

District Court's failure to reduce his offense level by an additional point for
acceptance of responsibility pursuant to U.S.S.G. S 3E1.1(b). Because we find
that the District Court erred in its application of this Guideline provision, we
will vacate this aspect of the sentencing order and direct the District Court on
remand to award the additional one-point reduction if it determines that Zwick
timely provided complete information to the government or timely notified the
government of his intent to plead guilty to enable the government and court to
conserve their resources. 1
I.
2

Appellant James J. Zwick was an elected member of the Ross Township Board
of Commissioners, the governing body of Ross Township, Pennsylvania. Zwick
and his fellow commissioners made policy decisions for the Township,
including fixing salary levels, executing contracts, authorizing bids, and
adopting budgets. In November of 1997, the government accused Zwick of
abusing his position to obtain illegal benefits and filed a five-count indictment
charging him with three counts of theft or bribery concerning federal programs
under 18 U.S.C. S 666, one count of mail fraud under 18 U.S.C. SS 2 & 1341,
and one count of bank fraud under 18 U.S.C. SS 2 & 1344. The District Court
had jurisdiction over Zwick's case pursuant to 18 U.S.C. S 3231.

Initial efforts at negotiating a guilty plea failed when the government declined
to accept a conditional plea, which would have preserved Zwick's legal
challenge to the application of S 666 when there is no connection between a
defendant's conduct and federal funds or programming. After declining to
accept the plea, the government filed a superseding indictment, which
contained all of the charges in the original indictment, and added another count
of theft or bribery under S 666, another count of bank fraud, and three more
counts of mail fraud. Again, Zwick was willing to plead guilty to the bank fraud
and mail fraud counts, but continued to seek a conditional guilty plea on the S
666 counts. During a status conference on January 27, 1998, Zwick informed
the District Court of his intention to plead guilty to the fraud counts, and the
District Court scheduled the plea hearing for February 2, 1998. Further plea
negotiations were derailed, however, when articles appeared in the Pittsburgh
Post Gazette and North Hills News Record on January 28, 1998 and January
29, 1998, declaring that Zwick would plead guilty to the fraud charges. Zwick
filed a motion with the District Court to dismiss the indictment based on
prosecutorial misconduct, alleging that, by providing information for the
articles, the government had violated its obligation to refrain from making
extrajudicial statements regarding the possibility of a guilty plea. The District
Court denied Zwick's motion. Zwick ultimately entered a guilty plea to the

fraud counts on March 9, 1998.

4

The case against Zwick on the S 666 charges proceeded to trial on March 10,
1998, after a brief continuance so that Zwick could enter treatment for his
gambling addiction. Although Zwick waived his right to a jury trial and
requested a bench trial, the government opposed this request, so the case was
tried to a jury. Zwick was convicted on counts one, two, and three of the four S
666 charges.

Because Zwick makes several challenges to the sufficiency of the evidence to

support his conviction under S 666, we will review the relevant facts adduced
at trial regarding the alleged bribes. In count one, the government alleged that
Zwick solicited a bribe from Christopher Kaclik, the owner and developer of
the Shannopin Square II office building located in Ohio Township. Kaclik first
became associated with Zwick in 1994, when he applied for sewer access for
the predecessor to Shannopin Square II, Shannopin Square I. At that time,
Kaclik testified that Zwick told him "anything you need to get done in the
Township of Ross, I can help you out." In May or June of 1996, during the
building of Shannopin Square II, Zwick met with Kaclik at the development
site and offered to secure the necessary votes for approval of the sewer taps in
exchange for a donation to the "Men's Summer League for Ross Township," a
basketball league run by Zwick. Kaclik wrote a check for $5,000, made out to
"James Zwick," with a notation reading "Men's Summer League 1996
Basketball." At Zwick's suggestion, Kaclik also provided Zwick with a blank
check for $7,500, which Zwick falsely represented he would put toward the
$17,500 required to reserve the sewer taps. When Kaclik discovered that Zwick
had personally endorsed and cashed the checks, he asked that Zwick return the
money. After repeated phone calls to Zwick, Kaclik received $2,500 from
Zwick.

Count two involved Zwick's dealings with the Fosnights, who had obtained an
option on property in Zwick's ward in Ross Township to build and operate an
assisted living facility there. To complete their project, the Fosnights were
required to obtain approval from the Ross Township Board of Commissioners
for various permits, including a conditional use permit and site plan approval.
On September 9, 1996, after the Township Planning Commission had already
recommended approval of the conditional use permit, the Board of
Commissioners voted to table the permit for further investigation. After that
meeting, Zwick contacted Tim Fosnight and set up a meeting with him and his
brother Aaron at the project site. Zwick offered to help them obtain the required
permits in exchange for a $15,000 donation to construct a playground on the
grounds of his "pet" project, North Hills Affordable Housing ("NHAH"). Zwick

explained that he could require the Fosnights to pay for a new traffic light and
traffic studies, which could involve significant costs of up to $100,000 and lead
to considerable delay, but he would not do so if such a "donation" was made.
7

The Fosnights made four payments to Zwick totaling $10,500. Zwick directed
them to make out the first two checks to "CSC"2 and "Cash" totaling $4,500.
Zwick cashed both, and the funds were never received by NHAH. The next two
checks, totaling $6,000, were made out to NHAH. Nonetheless, upon receipt of
the funds, Judith Eakin, Director of NHAH, wrote Zwick two checks for $6,000
as payment for the telephone system Zwick was installing for NHAH, the
project Zwick told the Fosnights their contribution would fund. Two months
later, Zwick informed Eakin that more money was needed to purchase
equipment that would complete the telephone system. When Eakin told Zwick
that NHAH had no additional funds available for the telephone system, as no
additional funds were in hand, Zwick assured Eakin that a further donation
would be forthcoming from the Fosnights, and that, if the anticipated donation
were not to be received in timely fashion, Zwick would personally guarantee
the sum in question. In reliance on Zwick's personal guarantee, Eakin was
authorized by her board president to advance Zwick the money required to
purchase the equipment. Accordingly, in the ensuing two weeks, Eakin issued
Zwick two checks totaling $7,440 made out to "Jim Zwick" as payment for the
phone system. Shortly thereafter, Eakin agreed to issue Zwick two
"replacement" checks for $7,740 when Zwick informed her that his accountant
said the earlier checks should have been issued to his company, Jim Zwick
Communications Systems, and not to him personally. Although Zwick provided
Eakin with a check for $7,740 to replace the check issued to him personally,
when NHAH attempted to cash it, it was returned from the bank due to an
irregular signature. NHAH never received these funds.

Zwick provided the Fosnights with a traffic study from his office so they would
not have to finance their own, and the Fosnights did not make a contribution to
the costs of constructing a traffic light. Zwick voted for the approval of the
Fosnights' conditional use permit. He also moved to approve the Fosnights'
final site permit but abstained from voting on it, explaining that he might put a
bid on the telephone work for the project and did not want to create the
appearance of a conflict of interest.

Count three charged that Zwick had solicited bribes from Justin Ruff, the owner
of Admiral Lawn Service, when he asked Ruff for "performance bonds" in
exchange for ensuring that Ruff was awarded landscaping contracts with Ross
Township. Although bonds were required for contracts over $10,000, Ross
Township commissioners were not authorized to solicit or accept them, and

certainly not entitled to cash them. Performance bonds were supposed to be

kept in escrow and returned once the project was complete. In the summer of
1996, Ruff gave Zwick two blank checks for $3,500 in connection with a
landscaping contract in Denny Park, Ross Township. Although Ruff was
awarded the contract and performed the work, his checks were never returned
to him; Zwick had cashed them and kept the proceeds. Zwick eventually repaid
Ruff after Ruff repeatedly asked him to do so. Zwick continued to solicit bribes
from Ruff in connection with various projects, including $4,500 for a $45,000
project that included cutting grass and dragging ball fields in Ross Township.
Ruff repeatedly refused to pay Zwick after becoming aware that Zwick's
requests violated Ross Township's policy regarding performance bonds.
10

After he was convicted on the three counts, Zwick filed a motion for judgment
of acquittal pursuant to Federal Rule of Criminal Procedure 29. The District
Court denied the motion on October 5, 1998. The Probation Office prepared a
Presentence Investigation Report recommending that Zwick be awarded a twopoint reduction for acceptance of responsibility pursuant to U.S.S.G. S
3E1.1(a). However, the Probation Office Report did not recommend awarding
the extra one-point reduction available under S 3E1.1(b) because the
government had to prepare for trial on the bribery counts. The District Court
found that the Probation Office's conclusion was a reasonable one "[b]ased on
the unusual circumstances and procedural posture of this case." The District
Court also considered that Zwick raised factual issues at trial, rather than
limiting himself to legal arguments. The District Court sentenced Zwick to
concurrent terms of thirty-three months as to each count, to be followed by five
years of supervised release. Zwick filed the instant appeal. We have jurisdiction
pursuant to 28 U.S.C. S 1291.
II.

11

Zwick contends that the evidence as to all three counts of his S 666 conviction
is insufficient because the government failed to prove the existence of any
connection between his conduct and federal funds or programming.
Specifically, he argues that S 666 requires such a connection, or, alternatively,
that the statute is unconstitutional as applied to him. We exercise plenary
review over questions of statutory interpretation. See United States v. Hayden,
64 F.3d 126, 128 (3d Cir. 1995).

12

The federal bribery statute at issue, 18 U.S.C. S 666, provides in pertinent part:

13

S 666. Theft or bribery concerning programs receiving Federal funds

14

(a) Whoever, if the circumstance described in subsection (b) of this section

exists (1) being an agent of an organization, or of a State, local, or Indian tribal
government, or any agency thereof --

15

....

16

(B) corruptly solicits or demands for the benefit of any person, or accepts or
agrees to accept, anything of value from any person, intending to be influenced
or rewarded in connection with any business, transaction, or series of
transactions of such organization, government, or agency involving anything of
value of $5,000 or more;

17

....

18

shall be fined under this title, imprisoned not more than 10 years, or both. (b)
The circumstance referred to in subsection (a) of this section is that the
organization, government, or agency receives, in any one year period, benefits
in excess of $10,000 under a Federal program involving a grant, contract,
subsidy, loan, guarantee, insurance, or other form of Federal assistance.

19

Prior to the enactment of S 666 in 1984, the limited scope of the federal bribery
statute and general theft of property statute hampered the federal government's
efforts to reach crimes affecting federal interests due to tracing requirements
and limitations on application to non-federal employees. See 18 U.S.C. SS 201,
641. By its terms, S 666 fills these particular voids; it imposes no title or tracing
requirements and covers non-federal employees. The government only must
prove the basic elements of the S 666 offense. However, as Zwick's challenge
reveals, the law is unsettled as to what S 666 requires. In Salinas v. United
States, 522 U.S. 52, 118 S. Ct. 469, 475 (1997), the Supreme Court resolved
one significant issue, namely, that the government need not show federal funds
actually were involved in or affected by an alleged bribery transaction. Yet, the
Court specifically left open the question before us, that is, to what extent the
statute "requires some other kind of connection between a bribe and the
expenditure of federal funds." Id. at 474. We had prior occasion in this Circuit
to examine the scope of S 666, see United States v. Cicco, 938 F.2d 441, 444
(3d Cir. 1991), but we have not addressed the specific question before us in this
case. It is instructive to review the approaches taken by federal courts that have
considered the extent to which S 666 requires a relationship between the
offense conduct and federal funds or programs.
A. Pre-Salinas

20

Prior to Salinas, courts evaluated the requisite relationship under S 666 between
a corrupt act and federal funds or programming from a number of different
perspectives. Several courts viewed the statute's "plain language" as lacking
any requirement, either implicitly or as an element of the offense, that the
government prove federal money was directly involved in, or traceable in some
way to, the corrupt transaction. Bolstering their view was the rationale that
Congress sought to "cast a broad net" in protecting the integrity of agencies
receiving federal funds and thus enacted S 666 with the specific intent to
eliminate any tracing requirements that previously had obstructed prosecution
efforts. See United States v. Westmoreland, 841 F.2d 572, 576-578 (5th Cir.
1988) (holding that direct involvement of federal funds in transaction is not an
essential element of bribery charge under S 666); see also United States v.
Pretty, 98 F.3d 1213, 1218-1219 (10th Cir. 1996) (finding that the defendant
was chargeable under S 666 even if actual money could not be traced to a
federal program); United States v. Paradies, 98 F.3d 1266, 1288-89 (11th Cir.
1996) (agreeing with Westmoreland that S 666 does not require that the
government trace the flow of federal funds to a particular project); United
States v. Valentine, 63 F.3d 459, 464-65 (6th Cir. 1995) (holding that
government does not need to prove that the misappropriated funds actually
came from a federal program in a theft case); United States v. Simas, 937 F.2d
459, 463 (9th Cir. 1991) (concluding that the government was not required to
trace federal funds to the project at issue to establish a S 666 violation).

21

Interpreting a different subsection of S 666, others held that the program

touched by bribery need not be the direct and actual recipient of $10,000 per
year in federal funds. See United States v. Coyne, 4 F.3d 100, 109-110 (2d Cir.
1993) (finding that S 666 lacks any requirement that the program at issue be the
actual recipient of federal funds); United States v. Little, 889 F.2d 1367, 1369
(5th Cir. 1989) (same).

22

When asked to uphold convictions or find defendants guilty with no proof of a

federal interest in the corrupt act, however, some courts were reluctant to do so.
See United States v. Foley, 73 F.3d 484, 488-493 (2d Cir. 1996) (reversing
Foley's conviction after government did not prove that corruption in some way
touched on federal funds); United States v. Frega, 933 F. Supp. 1536, 15401541 (S.D. Cal. 1996) (dismissing indictment for failure to allege that "federal
funds were corruptly administered, were in danger of being corruptly
administered, or even could have been corruptly administered."). Courts in this
camp expressed concern that interpreting S 666 to have no federal interest
requirement would make a federal offense out of routine local bribery,
dramatically changing the state-federal balance without an express
Congressional directive that it intended to do so. See Frega, 933 F. Supp. at

1540.
23

Courts finding that a federal connection is required were comfortable reaching

this result even though they agreed that S 666 does not require tracing of funds
or proof of an effect on federal funds and programs. For example, the Ninth
Circuit's holding in Simas, that tracing is not required, did not prevent the
District Court for the Southern District of California from concluding in Frega
that S 666 requires a federal connection. Likewise, the Court of Appeals for the
Second Circuit held that S 666 does not require that the corrupt act actually
affected federal funds in United States v. Bonito, 57 F.3d 167, 172- 173 (2d Cir.
1995), but concluded in a subsequent case that S 666 does require proof that the
corruption has some connection with federal funds. See Foley, 73 F.3d at 493.
A circuit split was created between the Second and Fifth Circuits when the
Fifth Circuit held that a defendant's conduct fell within S 666 without
specifically requiring a connection between the corrupt act and the federal
funds, other than the fact that the accepters of the bribes were local government
agents with duties relating to a federally- funded program. See United States v.
Marmolejo, 89 F.3d 1185, 1203 (5th Cir. 1996), aff'd, Salinas v. United States,
118 S. Ct. at 474. 3 Neither Foley nor Marmolejo was a unanimous decision.4
B. Salinas

24

On certiorari from the Fifth Circuit's Marmolejo decision, the Supreme Court
did not resolve the broad question before us of whether defendants can be
prosecuted under S 666 absent a federal interest in the offense conduct, but
instead addressed the narrower question of whether S 666 applies only when
the bribe has a demonstrated effect on federal funds. Salinas, 118 S. Ct. at 472.5
The Court found that the statute's "expansive, unqualified language, both as to
the bribes forbidden and the entities covered, does not support the interpretation
that federal funds must be affected to violate S 666(a)(1)(B)." Id. at 473. The
Court acknowledged that it could depart from a statute's clear language upon an
extraordinary showing of contrary intentions in the legislative history. See
United States v. Albertini, 472 U.S. 675, 680 (1985). However, because the
statute was enacted to expand the application of federal bribery provisions to
non-federal employees, the Court found that it would be "incongruous" to
restrict S 666 so that it applies only when a demonstrated effect on federal
funds is shown. Salinas, 118 S. Ct. at 473. Significantly, the Court found only
that the "text of S 666(a)(1)(B) is unambiguous on the point under
consideration here." Id. at 475 [emphasis added]. The Court did not reach a
holding on whether another kind of federal connection was required under S
666, believing that the facts of Salinas' case presented a sufficient connection:

25

We need not consider whether the statute requires some other kind of
connection between a bribe and the expenditure of federal funds, for in this case
the bribe was related to the housing of a prisoner in facilities paid for in
significant part by federal funds themselves. And that relationship is close
enough to satisfy whatever connection the statute might require.

26

Id. at 474. The Court accordingly rejected a challenge to the constitutionality of

the provision, at least as applied to Salinas:

27

Furthermore, there is no serious doubt about the constitutionality of S 666(a)(1)

(B) as applied to the facts of this case. Beltran was without question a prisoner
held in a jail managed pursuant to a series of agreements with the Federal
Government. The preferential treatment accorded to him was a threat to the
integrity and proper operation of the federal program. Whatever might be said
about S 666(a)(1)(B)'s application in other cases, the application of S 666(a)(1)
(B) to Salinas did not extend federal power beyond its proper bounds.

28

Id. at 475.
C. Post-Salinas

29

Courts clearly have recognized that Salinas left open the question of whether S
666 requires that a federal interest be implicated by the offense conduct. See
United States v. Dakota, 188 F.3d 663 (6th Cir. 1999) (finding that in Salinas,
"the nature of any necessary connection is left unanswered"); United States v.
Santopietro, 166 F.3d 88, 93 (2d Cir. 1999) (finding that the Supreme Court
"was careful to note that the statute survived the constitutional as- applied
challenge because the benefit obtained by means of the bribe -- the preferential
treatment -- `was a threat to the integrity and proper operation of the federal
program.' "). Therefore, Salinas has not prevented courts from reaching
conflicting conclusions on whether S 666 requires proof of a federal interest in
the offense conduct. The Sixth Circuit held post-Salinas that S 666 does not
require proof of a connection between the offense conduct and federal funds or
programming. See Dakota, 188 F.3d at 668 (finding no connection requirement
based on its determination in its pre-Salinas decision in Valentine, a theft case,
and providing no additional case cites or reasoning). Taking the opposite view,
the Second Circuit held that its holding in Foley -- that some federal connection
was required -- remained good law post- Salinas. See Santopietro, 166 F.2d at
93. The District Court of Massachusetts determined post-Salinas that S 666 was
unconstitutional as applied to the defendant in that case, reasoning that the
conduct at issue was not related to a legitimate national problem as required by

South Dakota v. Dole, 483 U.S. 203, 207-08 (1987) and thus Congress
exceeded its bounds under the spending clause. See United States v.
McCormack, 31 F. Supp.2d 176 (D. Mass. 1998).6
III.
30

Zwick asks us to add our voice to the chorus of opinions regarding the need to
prove that a federal interest was implicated by corrupt acts in a S 666
prosecution. To reach our own determination of whether S 666 requires such
proof, we begin by examining the statutory language itself. See Collinsgru v.
Palmyra Bd. of Educ., 161 F.3d 225, 233 (3d Cir. 1998) (evaluating the
Individuals with Disabilities Education Act) (citing United States v. Ron Pair
Enters., Inc., 489 U.S. 235 (1989)).

31

Section 666(a)(1)(B) requires proof that a bribe was given "in connection with"
any business or transaction of an agency described in subsection (b), namely
those receiving funds under certain federal assistance programs. The language
does not state explicitly that the government must show a connection between
the bribe and federal interests. Yet, the title of S 666, "Theft or bribery
concerning programs receiving Federal funds," implies that a federal connection
is anticipated, as does the statute's reference only to "agents" of entities
receiving federal funds who accept bribes "in connection with" the business of
the organization receiving federal funds.

32

The wording of this statute is far from straightforward in many respects. Our
reading of the statute, and the struggle of other courts to construe its meaning,
lead us to conclude that S 666 can hardly be described as "plain to anyone
reading the Act." Gregory v. Ashcroft, 501 U.S. 452, 467 (1991) (interpreting
Federal Age Discrimination in Employment Act).7 The only thing plain about
the statute is that it yields two plausible alternative interpretations on the issue
raised by Zwick. While noting that the fact pattern in Salinas satisfied any
federal connection test that S 666 might require, the Supreme Court pointedly
skirted the issue of whether the statute clearly mandated such a connection,
suggesting that the possibility of more than one interpretation is valid. The
most literal interpretation -- that the statute lacks a federal connection
requirement -- is troubling from an interpretative standpoint in that it broadens
the range of activity criminalized by the statute and alters the existing balance
of federal and state powers by encompassing acts already addressed under state
law in which the federal government may have little interest. We cannot
embrace such a broad reading of this federal criminal law unless that is the clear
directive from Congress. Given the statute's ambiguity on this question, we will
consult the legislative history. See Director, Office of Workers' Compensation

Programs v. Sun Ship, Inc., 150 F.3d 288, 291 (3d Cir. 1998); Collinsgru, 161
F.3d at 233.
33

Before proceeding further, it is worth reviewing our prior analysis of S 666,

albeit on a different issue, in United States v. Cicco, 938 F.2d at 444. In Cicco,
we considered whether 666 is sufficiently broad to cover the solicitation of
election day services in exchange for municipal employment. 8 On appeal, we
recognized that the statutory language could be construed literally to cover
Cicco's conduct, but found that "the language of the drafters of 666 is also
consistent with an intention of focusing solely on offenses involving theft or
bribery" in a classic sense. Cicco, 938 F.2d at 444. Thus, we found that the
statute was ambiguous and turned to the legislative history. Id.9

34

As in Cicco, we now face a choice between a highly literal interpretation -- that

no federal interest requirement is specifically set forth in the statute -- and a
plausible, albeit more contextual, alternative. Thus, as in Cicco, we will refer to
the legislative history for assistance in determining what Congress intended.
See Collinsgru, 161 F.3d at 233.10

35

The legislative history of 666 explains that the statute was enacted to correct
deficiencies in existing law by "creat[ing] new offenses to augment the ability
of the United States to vindicate significant acts of theft, fraud, and bribery
involving Federal monies that are disbursed to private organizations or State
and local governments pursuant to a Federal program." S. REP. NO. 98-225,
369- 370 (1984) (emphasis added), reprinted in 1984 U.S.C.C.A.N. 3182,
3510-11. A similar expectation is reflected in the stated purpose of the statute,
described as protecting the integrity of vast sums of money distributed through
Federal programs from theft, fraud, and undue influence by bribery. Indeed, the
title of the relevant section of this portion of the legislative history, "Program
Fraud and Bribery," suggests that Congress envisioned that a federally funded
program would be the target or victim of the corrupt activity punishable under
666.

36

There is no doubt that the legislative history promotes a broad interpretation of

the term "Federal program involving a grant, a contract, a subsidy, a loan, a
guarantee, insurance, or another form of Federal assistance" to supplement the
application of federal bribery and theft statutes. S. REP. NO. 98-225, 369-370.
However, those gaps to be filled by this statute relate to elements in the federal
bribery and theft statutes that increased the difficulty of reaching crimes in
which there was a real federal interest. Under the theft of federal property
statute, 18 U.S.C. 641, the federal government could prosecute only when it
could establish that the stolen property was property of the United States,

which often was impossible if title had passed before the property was stolen or
when federal funds were so commingled with non-federal funds that the federal
character of those funds could not be shown. Perhaps more relevant for our
purposes was the federal bribery statute, 18 U.S.C. 201, which was construed to
be inapplicable to some or all employees of private organizations receiving
federal funds, making it more difficult for federal authorities to prosecute
bribery even when federal interests were at stake. The goal was to overcome
impediments to reaching actions in which there was a federal interest, not to
federalize crimes in which a federal interest was lacking.
37

Not surprisingly, the Senate Report notes that the intent of the statute is "to
reach thefts and bribery in situations of the types involved in the Del Toro,
Hinton, and Mosley cases cited herein," three cases in which the corrupt
transaction clearly implicated federal interests. S. REP. No. 98-225, 369-370. In
United States v. Del Toro, 513 F.2d 656 (2d Cir. 1975), the defendants
conspired to bribe Pedro Morales, the Assistant Administrator of the HarlemEast Harlem Model Cities Program, a program that was financed and
supervised by the United States Department of Housing and Urban
Development ("HUD"). The federal government paid one hundred percent of
the cost of the program, and eighty percent of its salaries, including Morales's
salary. Id. at 658, 661. The defendants wanted Morales to use his position with
the program to secure Model Cities an office space lease in a building for which
one of the defendants was the rental agent. Id. at 658. Because Morales was a
city employee, and not a federal one, however, the Second Circuit Court of
Appeals concluded that Morales was not a "public official" for purposes of 201:
"We do not believe that Morales was acting `under or by authority of any such
department, agency, or branch' of the federal government. He was a city
employee, carrying out a task delegated to him by his superior, another city
employee." Id. at 662. Yet, the federal interest in Morales' corrupt transaction is
apparent: the bribed official administered a program significantly funded by
federal monies and the bribe was related to the program administered by the
official.

38

In the other two decisions cited in the Senate Report, the Seventh Circuit
determined that non-federal employees could be considered "public officials"
for purposes of 201, but this decision turned on the fact that the defendants
exercised considerable discretion in the administration of federal funds and the
bribery related to the defendant's administration of the program, which for our
purpose suggests that a federal interest clearly was implicated. See United
States v. Hinton, 683 F.2d 195, 198-200 (7th Cir. 1982); United States v.
Mosley, 659 F.2d 812, 816 (7th Cir. 1981). In Hinton, the defendants were
officials of United Neighborhoods, Inc., a non-profit corporation that had

entered into a contract with the City of Peoria to administer funds that HUD
awarded to Peoria. The defendants had discretion in administering the federal
funds, and the federal funds paid the defendants' salaries and the entire cost of
the program they administered. Significantly, the bribery related to
rehabilitation contracts that fell within the purview of the program and were
paid with federal funds. Hinton, 683 F.2d at 196-99.11
39

In Mosley, the defendant, an employee of the State of Illinois Bureau of

Employment Security ("IBES"), was convicted of receiving bribes in exchange
for giving preferential treatment to Comprehensive Employment and Training
Programs Act ("CETA") applicants when he evaluated and referred applicants
for CETA-funded jobs. Mosley, 659 F.2d at 813. The federal government
funded the CETA program, the CETA jobs, and all of IBES's costs, including
Mosley's salary. Id. As in Hinton, the defendants could be considered public
officials because the program in Mosley was funded by the federal government,
the defendant exercised discretion in the administration of federal funds, and
the bribery related to the defendant's administration of the program. Again, the
federal interest is clear.

40

The Senate Report's examples of intended 666 offenses involved situations in

which the corrupt acts clearly implicated a federal interest, as the acts were
closely tied to the funded programs.12 Another comment in the Senate Report
illustrates that an entity's receipt of federal funds does not automatically
establish a federal interest in corrupt activity of employees of that entity:

41

For example, if a government agency lawfully purchases more than $10,000 in

equipment from a supplier, it is not the intent of this section to make a theft of
$5,000 or more from the supplier a Federal crime.

42

S. REP. NO. 98-225, 370. Thus, nothing in the legislative history suggests that
Congress intended to go well beyond the examples in Del Toro, Hinton, and
Mosley to make 666 applicable when no federal interest is implicated by certain
offense conduct.

43

Not only does the legislative history of 666 lead us to conclude that the statute
should be read to incorporate a federal interest requirement, but several wellestablished principles of statutory construction dictate this result. According to
the Supreme Court, ambiguity in the language of a criminal statute should be
resolved in favor of the defendant. See United States v. Bass, 404 U.S. 336, 347
(1971) ("In various ways over the years, we have stated that `when choice has
to be made between two readings of what conduct Congress has made a crime,

it is appropriate, before we choose the harsher alternative, to require that

Congress should have spoken in language that is clear and definite.' ") (quoting
United States v. Universal C.I.T. Credit Corp., 344 U.S. 218, 221-22 (1952)).
Congress has not "clearly and definitely" instructed that 666 should be applied
even absent some federal interest in the offense conduct. We should refuse the
broader reading urged by the government and adopt the narrower construction
of the activity criminalized by this provision. See also LaHue, 170 F.3d at 1029
(in evaluating another subsection of 666, "we must exercise particular restraint
in interpreting federal criminal statutes") (citing Dowling, 473 U.S. at 214).
44

The Supreme Court also has instructed us that we should not interpret a statute
in a manner that significantly alters the federal-state balance unless Congress
has clearly indicated that it intended to do so. See Bass, 404 U.S. at 349 ("In
traditionally sensitive areas, such as legislation affecting the federal balance,
the requirement of clear statement assures that the legislature has in fact faced,
and intended to bring into issue, the critical matters involved in the judicial
decision."); see also McCormack, 31 F. Supp.2d at 186-187; Frega, 933 F.
Supp. at 1540 (citing Bass). If we adopted the government's interpretation that
666 requires no connection between the offense conduct and federal funds or
programming, 666 would criminalize a host of corrupt acts committed by state
agents, among others, by virtue of the fact that all states receive at least
$10,000 in federal funds per year. See McCormack, 31 F. Supp.2d at 186. This
result raises significant federalism concerns, turning traditionally local conduct
into a matter for federal enforcement involving a substantial extension of
federal law enforcement resources. See Bass, 404 U.S. at 350. We will not
transform 666 into a general federal anti- corruption statute when Congress has
not clearly expressed its intention to do so. See McCormack, 31 F. Supp.2d at
186 (expressing concern about adopting government's interpretation); Frega,
933 F. Supp. at 1540. As the Supreme Court stated in Bass, "consistent with our
regard for the sensitive relation between federal and state criminal jurisdiction,
our reading preserves as an element . . . a requirement suited to federal criminal
jurisdiction alone." 404 U.S. at 351.13

45

Finally, when a statute is unclear, we will construe it so as to avoid

constitutional concerns, assuming that such construction does not amount to a
rewriting of the statute. See Albertini, 472 U.S. at 680. Interpreting 666 to have
no federal interest requirement produces serious concerns as to whether
Congress exceeded its power under the Spending Clause in enacting this
statute. See McCormack, 31 F. Supp.2d at 187-89.14 To pass muster under the
Spending Clause, legislation regulating behavior of entities receiving federal
funds must, among other things, be based upon a federal interest in the
particular conduct. See South Dakota v. Dole, 483 U.S. 203, 207 (1987).

Applying 666 to offense conduct, absent evidence of any federal interest, would
appear to be an unconstitutional exercise of power under the Spending Clause.
46

Thus, we hold that 666 requires that the government prove a federal interest is
implicated by the defendant's offense conduct. In so holding, we part ways with
the Sixth Circuit's holding in Dakota and agree with the result reached by the
Second Circuit, as expressed most recently in Santopietro, and the District
Court for the Southern District of California in its pre-Salinas Frega decision.

47

Given that the Supreme Court found a sufficient federal connection existed in
Salinas, we surmise that a highly attenuated implication of a federal interest
will suffice for purposes of 666.15 We can conceive of several ways in which
the government could prove a federal interest in a 666 in light of this threshold.
The amount of federal funds could provide the requisite federal implication,
even if the purpose of those funds has no explicit relationship to the subject of
the bribe. If, for example, in a given year, the greater part of a township's
budget came from federal funds, bribery of a township agent for any purpose
might be said to implicate federal interests. Absent that situation, the offense
conduct would have to somehow implicate a particular substantive federal
interest, as the Supreme Court found it did in Salinas, where federal funds were
being provided to house federal prisoners in local prisons.

48

Examples from other cases may be illustrative. The Second Circuit found a
sufficient federal connection in Santopietro when real estate developers made
corrupt payments to defendants to secure defendants' influence with city
agencies overseeing housing and urban development programs that were the
beneficiaries of federal funds. See Santopietro, 166 F.3d at 93 - 94. The Second
Circuit concluded that "this is not a case where the transactions sought to be
influenced concerned one department of a city and the requisite $10,000 of
federal funds were received by a totally unrelated department." Id. However,
the Court noted that the federal interest requirement "would not permit the
Government to use section 666(a)(1)(B) to prosecute a bribe paid to a city's
meat inspector in connection with a substantial transaction just because the
city's parks department had received a federal grant of $10,000." Id., at 93.

49

The District Court in Frega concluded that bribing state court judges to
influence decisions in certain cases did not produce the requisite federal interest
when California received federal funds for purposes not related to the state
courts. See Frega, 933 F.Supp. at 1542 - 1543. The Court hypothesized,
however, that some circumstances involving state court judges might produce
the requisite federal connection, such as if the state court system received
federal funding for the purpose of appointing counsel in death penalty habeas

proceedings, and a state court judge accepted a bribe in exchange for appointing
a particular attorney as habeas counsel. See id.
50

There was evidence at Zwick's trial revealing that the federal funds were
provided to Ross Township for reimbursement for emergency snow removal
and funding of a project to prevent stream bank erosion.16 These uses bear no
obvious connection to Zwick's offense conduct, which involved sewer access,
use permits and landscaping performance bonds. However, we will not direct
the entry of a judgment of acquittal because the District Court ruled that 666
did not require, and thus the government need not present proof, that Zwick's
conduct implicated a federal interest.17 Instead, we will vacate Zwick's
conviction and remand for a new trial.
IV.

51

Zwick raises several other challenges to his 666 conviction that we find to be
without merit. In connection with the conduct charged in count one, Zwick
argues that there was insufficient evidence establishing that he acted as an
agent of an entity that received the requisite amount of federal funds as 666
requires. Zwick contends that the evidence presented at trial shows that Zwick
was acting as an agent of Lowries Run, not as an agent of Ross Township. The
government's theory at trial was that Zwick had offered to obtain sewer access
for Kaclik in his capacity as an agent of Ross Township, not of Lowries Run,
and the government did not offer any proof that Lowries Run received federal
funds. Zwick concludes that his conviction on count one should be reversed.

52

Under 666(b), the government must establish that at least $10,000 in federal
funds within a one-year period were received by the entity for which the
defendant was acting as an agent. A defendant advancing a claim based on
insufficiency of the evidence carries a heavy burden, as we apply a particularly
deferential standard in reviewing this type of claim. United States v. Dent, 149
F.3d 180, 187 (3d Cir. 1998). We do not weigh the evidence or determine the
credibility of the witnesses. Id. Rather, viewing the evidence in the light most
favorable to the government, we will sustain the verdict if any rational trier of
fact could have found the essential elements of the crime beyond a reasonable
doubt. Id.

53

The Lowries Run Sanitary Authority ("Lowries Run") is a joint venture

between Ross Township and the McCandless Township Sanitary Authority;
two of the members of its governing board are appointed by Ross Township,
and two are appointed by McCandless Township. Lowries Run board members

need not be commissioners from Ross Township. Zwick was selected as a

member of the Lowries Run board, but not in his capacity as a Ross Township
commissioner. Lowries Run operates independently from Ross Township; it
has its own bank account that is administered by the McCandless Sanitary
Authority, and money that it receives belongs to Lowries Run, not Ross
Township.
54

At trial, Kaclik testified that he could have applied to either Ross Township or
Lowries Run for sewer access for his project, Shannopin Square II. Kaclik
testified further that he understood that, in exchange for his money, Zwick
would influence Ross Township to approve Kaclik's sewer access application;
although he had the option of tapping into either the Ross Township or the
Lowries Run sewer system, he preferred the Township option because it was
less expensive. App. 732, 758-59. Thomas D. Lavorini, Manager of Ross
Township, testified that he believed Kaclik approached Ross Township about
obtaining access to the Ross Township sewer line, and that Lavorini may have
had a discussion with Zwick about Kaclik's request. App. 658- 59. Kaclik also
testified that Zwick had told him he would obtain the necessary Republican and
Democratic votes and that Zwick cashed Kaclik's check so that the Township
would not know the source of the money. App. 733, 740- 41. Both of Zwick's
comments suggest Zwick was offering to deal with the Township, and not
Lowries Run, on Kaclik's behalf.

55

The substance of Kaclik's testimony suggests that he had some confusion

regarding the difference between the Township and Lowries Run, and there
was documentary evidence that the only formal application Kaclik filed was
with Lowries Run. App. 751-52, 761-62. However, assuming a jury found
Kaclik and Lavorini credible, this evidence is not so compelling that it could
have prevented a jury from finding, based on the evidence before it, that Zwick
was acting as an agent of Ross Township during the sewer access transactions.
Thus, we reject Zwick's argument.

56

With respect to count two, Zwick also argues that the government failed to
establish that Zwick intended to be influenced "in connection with any business,
transaction, or series of transactions of such organization, government, or
agency involving anything of value of $5,000 or more." See 18 U.S.C. 666(a)
(1)(B) (emphasis added). According to Zwick's interpretation of 666, the
transaction or transactions must be worth at least $5,000 to Ross Township, not
to the other entities involved. He also claims that the transactions involved in
count two were not worth $5,000 or more as 666 requires, but rather worth only
$700, the cost of the conditional use permit and thefinal site plan that Zwick
offered to help the Fosnights obtain.

57

First, we disagree with Zwick's reading of the statute regarding valuation of the
$5,000 element. We find that the plain language of the statute does not require
that value be measured from the perspective of the organization, government,
or agency. See 18 U.S.C. 666(a)(1)(B) (prohibiting bribery "in connection with
any business, transaction, or series of transactions of such organization,
government, or agency involving anything of value of $5,000 or more"
(emphasis added)); see also Santopietro, 166 F.3d at 93 ("there is no
requirement that the corrupt transactions are worth $5,000 or more to the entity
receiving the federal funds"); United States v. Marmolejo, 89 F.3d 1185 (5th
Cir. 1996)18 (finding that the $5,000 value element was designed to limit
application of 666 to significant corrupt transactions, not to restrict the manner
in which or the perspective from which that value is to be calculated). See also
United States v. Apple, 927 F. Supp. 1119, 1126 (N.D. Ind. 1996) (concluding
that the government is not required "to show that the thing that held value of
over $5,000 held that value for" the entity); United States v. Vona, 842 F.
Supp. 1534, 1536 (W.D.N.Y. 1994) (finding that the Act does not require that
the defendant gain $5,000 or that the victim lose $5,000, but that "as long as the
overall transaction or the target of the bribe is valued at $5,000 or more, the
element of the crime is satisfied"); United States v. Mongelli, 794 F. Supp. 529,
530 (S.D.N.Y. 1992) ("The $5,000 triggering provision should thus be
interpreted as intended to require that substantial matters of that actual value be
involved, not that the agency be at risk of losing that amount.").19

58

Second, we reject Zwick's argument that the transactions at issue were worth
less than $5,000. Significantly, the Fosnights agreed to pay Zwick $15,000 for
his assistance, which indicates that the value of the transactions was well above
$700 and the $5,000 minimum. App. 424 - 425. See Marmolejo, 89 F.3d at
1194 (finding that the value of the conjugal visits was more than $5,000,
because the prisoner was willing to pay $6,000 a month plus $1,000 per visit
for them). There was evidence at trial that the Fosnights would have lost the
$10,000 they paid to the owners of the property had their conditional use permit
not been approved. App. 420-21, 465. The overall value of the Fosnight project
was $4.6 million, and Ross Township would receive $90,000 in tax benefits
from the project on a yearly basis, as well as $6,939 in permit fees before the
project could go forward. App. 439, 442. The Fosnight project was clearly a
significant transaction within the intended reach of the statute. Because we
believe that there was substantial evidence from which the jury could have
found that the $5,000 element was satisfied, we reject Zwick's challenge to the
calculation of value under 666 with respect to count two.

59

We also are not persuaded by Zwick's argument, applicable to all counts, that
the District Court improperly instructed the jury that the future value of the

transaction can be taken into account. Zwick cites the Sixth Circuit's decision in
Valentine that the government could not aggregate the values of numerous
thefts that occurred over a three-year period in order to meet the $5,000
threshold under 666(a)(1)(A), the theft provision. See Valentine, 63 F.3d at
464. Valentine is simply inapposite. Under the theft provision, the stolen
property must be worth $5,000, while the bribery provision looks to the value
of the underlying business or transaction. Compare 18 U.S.C. 666(a)(1)(A)
(prohibiting theft of "property that . . . is valued at $5,000 or more") with 18
U.S.C. 666(a)(1)(B) (prohibiting bribery "in connection with any business,
transaction, or series of transactions of such organization, government, or
agency involving anything of value of $5,000 or more"). Further, unlike in
Valentine, the government in this case did not attempt to proffer evidence of the
value of transactions or business outside of the statutory period in order to
satisfy the $5,000 threshold. Here, the references to Ross Township's future
revenues from the transactions were actually evidence of their current value.
Even without reference to future revenues, there is substantial evidence
establishing that the present value of the transactions and business involved in
each of counts one, two, and three was at least $5,000. The sewer taps that
Zwick offered to obtain for Kaclik were clearly worth more than $5,000, as
Kaclik was willing to pay $17,500 to ensure that he received them; the
contracts that were the subject of the bribery at count three were worth
$45,000; and the permits in count two were worth more than $5,000 to the
Fosnights, because, as detailed above, they were willing to pay Zwick $15,000
to ensure that they received them and would have lost $10,000 if they did not
receive them in a timely manner.
V.
60

Zwick's final contention is that the District Court erred in failing to award him
an additional point reduction in his offense level for acceptance of
responsibility pursuant to U.S.S.G. 3E1.1(b). We give great deference to the
District Court's evaluation of the defendant's acceptance of responsibility, but
exercise plenary review of the Court's construction of 3E1.1. See United States
v. Ceccarani, 98 F.3d 126, 129 (3d Cir. 1996). We review the District Court's
determinations of fact for clear error. Id.
Section 3E1.1 provides:

61

(a) If the defendant clearly demonstrates acceptance of responsibility for this

offense, decrease the offense level by 2 levels.

62

(b) If the defendant qualifies for a decrease under subsection (a), the offense

62

(b) If the defendant qualifies for a decrease under subsection (a), the offense
level determined prior to the operation of subsection (a) is level 16 or greater,
and the defendant has assisted authorities in the investigation or prosecution of
his own misconduct by taking one or more the following steps:

63

(1) timely providing complete information to the government concerning his

own involvement in the offense; or

64

(2) timely notifying authorities of his intention to enter a plea of guilty, thereby
permitting the government to avoid preparing for trial and permitting the court
to allocate its resources efficiently,

65

decrease the offense level by 1 additional level.

66

The District Court awarded Zwick the two-point reduction provided in

3E1.1(a). At issue here is the Court's rejection of the one-point reduction under
3E1.1(b). Section 3E1.1(b) focuses on the timeliness of a defendant's offer of
information or notice of intent to plead such that the defendant provides an
opportunity to the government and court to conserve resources. See U.S.S.G.
3E1.1, App. Note 6 ("For example, to qualify under subsection (b)(2), the
defendant must have notified authorities of his intention to enter a plea of guilty
at a sufficiently early point in the process . . . ."); United States v. Narramore,
36 F.3d 845, 847 (9th Cir. 1994) ("The additional reduction in section (b) with
which we are concerned, is unlike the initial reduction in section (a), for it does
not rest upon the demonstration of contrition. Section (b) allows the defendant
to earn an additional reduction by providing timely notice of his intention to
plead guilty, and it thus creates an incentive for an early plea").

67

Parsing section 3E1.1(b), it directs the sentencing judge to decrease the offense
level by one additional level if 1) the defendant is entitled to the two-point
reduction under 3E1.1(a); 2) the defendant's offense level is 16 or greater; and
3) the defendant satisfies either of the two requirements provided in
subparagraphs (b)(1) and (b)(2). See United States v. Paster, 173 F.3d 206,
214-15 (3d Cir. 1999).

68

Zwick clearly satisfied the first two conditions under subsection (b), in that he
was awarded the two-point reduction under 3E1.1(a), and had an offense level
of 22.20 However, the District Court adopted the Probation Office's conclusion
that Zwick was not entitled to the extra point under subsection (b) because the
government was required to prepare for trial,21 noting also that defendant made
factual arguments at trial.22

69

We believe that the District Court did not fully consider the elements of
subsection (b). To receive an additional reduction for timely providing
complete information to the government, subparagraph one of 3E1.1(b)
requires that the defendant timely provide complete information; it does not
require, either expressly or impliedly, that the defendant actually forego his
trial. See 3E1.1(b)(1) (providing for a reduction for a defendant for "timely
providing complete information to the government concerning his own
involvement in the offense"). Instead of concluding that the one-point
deduction was foreclosed simply because the government prepared for trial, the
District Court should have considered whether Zwick timely provided complete
information as the Guideline requires.

70

Likewise, subparagraph two of 3E1.1(b) requires that the defendant express his
notice of intent to plead guilty early enough to permit the court and government
to conserve resources, not that a guilty plea be entered in a timely fashion or
that the reduction is unavailable if the case proceeds to trial. See 3E1.1(b)(2).
Permitting the government and court to conserve resources, see WEBSTER'S II
NEW RIVERSIDE UNIVERSITY DICTIONARY 876 (defining "permit" as "
[t]o afford opportunity"), is not synonymous with the actual conservation of
resources. We recognize that other courts, such as the Seventh Circuit Court of
Appeals, require actual conservation of resources as a condition to receiving the
point deduction under subsection (b)(2). See United States v. Wilson, 134 F.3d
855, 872 (7th Cir. 1998) ("courts are still required to consider whether this
expressed intent actually resulted in conserving Government and court
resources."). However, we believe that our reading is true to the plain language
of the Guideline and comports with the underlying purpose the Guideline
serves. This Guideline rewards the defendant's willingness to acknowledge
responsibility for criminal wrongdoing in lieu of requiring all allegations to be
proved in a trial. As such, the Guideline is triggered by the defendant's
behavior, not by whether other factors out of the defendant's control prevent the
acceptance of the defendant's plea. Surely the possibility of an extra point
reduction is not necessarily foreclosed, for instance, by the government's
rejection of a plea, for whatever reason. The government's refusal to accept the
plea and to avail itself of the opportunity to conserve resources is not a per se
barrier to the one-point deduction. If the drafters of the Guideline intended to
limit the award of the point to situations in which a plea was entered, or
resources were actually conserved, they could have crafted the language to
reflect this intention.

71

We recognize that conditional pleas raise unique issues, which need to be

evaluated on a case-by-case basis.23 We also acknowledge that it may be a rare
case in which anything short of a timely entry of a guilty plea suffices for

purposes of 3E1.1(b).24 However, because the District Court did not fully
address, let alone resolve, whether Zwick's pre-trial activity entitled him to a
reduction under the specific terms of 3E1.1(b), we will remand to the District
Court for consideration of whether Zwick timely provided complete
information to the government under 3E1.1(b)(1), or if his expression of his
intent to plead guilty was sufficiently timely under 3E1.1(b)(2) to permit the
conservation of government and court resources.25
VI.
72

For all of the foregoing reasons, we will remand this matter to the District
Court for a new trial. We also will vacate the District Court's sentencing
decision denying the additional one-point reduction under 3E1.1(b), and
remand to the District Court so that it may determine if Zwick is entitled to a
reduction under 3E1.1(b) for timely providing information to the government,
or timely offering notice of intent to plead guilty. We reject Zwick's other
contentions, and will affirm as to those issues.

Notes:
*

Hon. Louis H. Pollak, Senior Judge of the United States District Court for the
Eastern District of Pennsylvania, sitting by designation.

We reject Zwick's remaining challenges to the application of the statute to his

particular situation, as we discuss more fully below.

CSC is an abbreviation for the name of Zwick's company. App. 427.

Marmolejo and Foley also parted ways regarding how to determine whether the
transactions at issue are equal to or greater than $5,000 in value.

In the Foley dissent, Judge Lumbard argued, in essence, that there is no federal
connection requirement. Foley 73 F.3d at 494-497 (Lumbard, J., dissenting).
Rather, the plain language of S 666 simply outlaws bribes to agents of
organizations that receive federal funds: "It is sufficient that Foley was an agent
of a government that received $10,000 in federal funds and that he took a bribe
involving something worth at least $5,000." Id. at 495. Taking the opposite
view in the Marmolejo dissent, Judge Jolly endorsed the Second Circuit
majority's reasoning in Foley; he argued that the Marmolejo majority
misinterpreted its earlier decision in Westmoreland, on which it relied, and that
S 666 was not intended to criminalize all acts of bribery involving entities that

happened to receive some federal funding. Marmolejo, 89 F.3d at 1201-1204

(Jolly, J., dissenting).
5

Salinas, a deputy sheriff for Hidalgo County, Texas, was convicted under S 666
for accepting benefits from a federal prisoner in his custody in exchange for
allowing the prisoner to have "contact visits" with his wife and girlfriend. See
Marmolejo, 89 F.3d at 1191. Hidalgo County had an agreement with the federal
government to house federal prisoners in exchange for grants for improving its
prison as well as payment per day for each federal prisoner housed. Id.

Judge Gertner comprehensively evaluated whether "S 666 give[s] federal

authorities a blank check to prosecute ostensibly significant acts of corruption
involving the Malden Police Department just because the department receives a
certain level of federal funds." Id. at 181. While expressing the view that the
relevant language in S 666(a)(1)(B), "in connection with any business or
transaction," is ambiguous and requires an examination of legislative history,
id. at 186 (citing Foley, 73 F.3d at 490 - 492 and Frega, 933 F. Supp. at 1543),
Judge Gertner concluded that Salinas foreclosed her from so ruling based on
Salinas' holding that S 666(a)(1)(B) is clear and unambiguous. McCormack, 31
F. Supp.2d at 186. Yet, the Court acknowledged that Salinas expressly left open
the possibility that S 666(a)(1)(B) is unconstitutional as applied to cases that
lack some connection between the corrupt activity and federal funds or
programming. The Court also found McCormack's prosecution under S 666
deficient in another respect relating to the "$5,000 value" requirement. Id. at
189.

We find that nothing in Salinas prevents us from determining that S 666(a)(1)

(B) is ambiguous on the issue of whether there is a federal connection
requirement, thus we disagree with the determination on this point reached by
the District Court in McCormack. See McCormack, 31 F. Supp.2d at 186
(finding that "Salinas has shut off this avenue of analysis."). Salinas found S
666(a)(1)(B) clear and unambiguous only on the question of whether the
government must prove that the corrupt activity had a demonstrated effect on
federal funds or programming. Salinas, 118 S. Ct. at 475.

The District Court entered a judgment of acquittal in Cicco after determining

that Congress did not intend 666 to apply to Cicco's actions and that the
government's interpretation of the statute was unconstitutionally vague and
deprived Cicco of fair notice. Id. at 444.

In outlining our approach in Cicco, we stated that examining the reach of a

federal criminal statute requires close attention to statutory language, legislative
history, and purpose to strictly determine the scope of forbidden conduct. Id.

(citing Dowling v. United States, 473 U.S. 207, 213 (1985)). We learned
through our legislative history review in Cicco that Congress enacted 666 to
"protect federal funds by authorizing federal prosecution of thefts and
embezzlement from programs receiving substantial federal support even if the
property no longer belonged to the federal government . . . [and] to enlarge and
clarify the class of persons subject to the federal bribery laws" to go beyond
only those who can be considered federal public officials. Cicco, 938 F.2d at
445 (citations omitted).
10

Examination of and references to the legislative history are not uncommon

among the decisions that analyze 666. The Supreme Court in Salinas referred to
Congress' intentions in enacting 666, although it did not review or cite
Congressional reports directly. See Salinas, 118 S. Ct. at 474 (recounting
Congress's intent in enacting 666 based on a "chronology [of case law] and the
statutory language" and rejecting Salinas' interpretation of the legislative
history). See also Bonito, 57 F.3d at 172 (citing legislative history noted by
Bonito and ultimately rejecting Bonito's arguments); Valentine, 63 F.3d at 463
(reviewing legislative history to determine whether it supported Valentine's
argument); Westmoreland, 841 F.2d at 576-577 (reviewing legislative history "
`as an additional tool of analysis' with the recognition that our inquiry will
result in `a limitation on the plain meaning of the statutory language' only under
exceptional circumstances") (quoting Garcia v. United States, 469 U.S. 70, 75
(1984)); Frega, 933 F. Supp. at 1542-1543 (reviewing legislative history after
finding statute ambiguous because interpretation not requiring federal
connection would alter federal-state balance absent a clear Congressional
directive). Courts interpreting subsection (b) have followed a similar course.
See United States v. LaHue, 170 F.3d 1026, 1030 (10th Cir. 1999) ("Like other
courts that have wrestled with an interpretation of section 666(b), we look to the
legislative history and the underlying purpose of the statute for guidance");
United States v. Copeland, 143 F.3d 1439, 1442 (11th Cir. 1998) (having
reached the conclusion on a "plain reading of 666(b), we normally would not
engage in any additional analysis. However, since some circuits have found
666(b) to be ambiguous on its face, it is worth noting that our conclusion is
consistent with the statute's legislative history."); Coyne, 4 F.3d at 109
(reviewing legislative history regarding whether program at issue must be
actual recipient of federal funds).

11

In affirming Hinton, the Supreme Court determined that individuals employed

by private organizations that receive federal funds may be covered by 201, at
least if an individual possesses "some degree of official responsibility for
carrying out a federal program or policy." Dixson v. United States, 465 U.S.
482, 499-500 (1984). In limiting the parameters of its holding, however, the
Supreme Court cautioned:

By finding petitioners to be public officials within the meaning of section

201(a), we do not mean to suggest that the mere presence of some federal
assistance brings a local jurisdiction and its employees within the jurisdiction of
the federal bribery statute or even that all employees of local organizations
responsible for administering federal grant programs are public officials within
the meaning of section 201(a). To be a public official under section 201(a), an
individual must possess some degree of responsibility for carrying out a federal
program or policy . . . individuals who work for block grant recipients and
business people who provide recipients with goods and services can not be said
to be public officials under section 201(a) unless they assume some duties of an
official nature.
Id. at 500.
12

See also LaHue, 170 F.3d at 1031 ("In all three cases [Del Toro, Hinton, and
Mosley], the organization in question received federal program funds as the
intended recipient, and each was charged with the responsibility for
administering or spending the federal grant monies to benefit the intended
beneficiaries.").

13

In interpreting the illegal gratuity statute, 18 U.S.C. 201(c)(1)(A), Justice

Scalia stated for an unanimous Court that "a statute in this field that can
linguistically be interpreted to be either a meat axe or a scalpel should
reasonably be taken to be the latter. Absent a text that clearly requires it, we
ought not expand this one piece of the [illegal gratuity] regulatory puzzle so
dramatically as to make many other pieces misfits." United States v. SunDiamond Growers of California, 526 U.S. 398, 119 S. Ct. 1402, 1410 (1999)
(holding that 201(c)(1)(A) requires that the government prove a link between a
thing of value conferred upon a public official and a specific official act for or
because of which it was given). We point out, however, that 201 and 666 are
not necessarily parallel in their applications, so these remarks do not dictate a
substantive outcome here. See United States v. Jennings, 160 F.3d 1006, 1015
fn 4 (4th Cir. 1998) (outlining distinctions between application of two
provisions but not deciding whether 666, like 201, prohibits gratuities).

14

According to the Second Circuit, "Salinas may be read to indicate that the
`threat to the integrity and proper operation of [a] federal program' created by
the corrupt activity is necessary to assure that the statute is not
unconstitutionally applied." Santopietro, 166 F3d at 93 (citing Salinas, 118 S.
Ct. at 475).

15

In Salinas, the Supreme Court found that the federal government's interest in
the housing of federal prisoners in federally-funded local facilities was

sufficiently implicated when a prison official accepts bribes from a federal

prisoner in exchange for permitting the prisoner to have conjugal visits. See
Salinas, 118 S. Ct. at 474.
16

The government presented proof that Ross Township received in excess of

$10,000 in federal funds in a one-year period from two sources. First, Ross
Township applied for federal reimbursement under a Presidential Declaration of
Major Disaster for costs associated with the blizzard of 1996 and consequently
received $30,587 in June of 1996 from the Federal Emergency Management
Agency ("FEMA"). The funds first flowed through the Pennsylvania
Emergency Management Agency ("PEMA"), but they were segregated from
other Commonwealth funds prior to distribution to Ross Township. Second, the
United States Army Corps of Engineers carried out and funded a $326,200
project, to which Ross Township contributed $65,300, to prevent the erosion of
a stream bank in Ross Township.

17

At a pretrial conference, counsel discussed with the District Court whether 666
requires a showing of a federal interest in Zwick's conduct. Counsel for the
government informed the District Court that "there are crucial issues as to what
would be admissible and arguable at trial that turn on what the jury instructions
that you issue will be. For example, we would need a determination on whether
there does or does not need, as we maintain, need to be a nexus between the
bribe and receipt of federal funds by Ross Township." App. 269. In response,
the District Court stated at least twice that "there doesn't have to be any
relationship." App. 270, line 9, App. 271, lines 3-4.

18

In Marmolejo, defendant local officials agreed to provide a prisoner with

conjugal visits in exchange for $6,000 a month and $1,000 for each visit. Id. at
1191. To value the transactions at issue, the Court looked to "traditional
valuation methods," specifically, what a person in the marketplace would be
willing to pay for the transaction. Id. at 1193.

19

We also reject Zwick's argument that we should follow the Second Circuit in
requiring that the value be determined from Ross Township's perspective. For
this argument, Zwick relies on the Second Circuit's ruling in Foley that the
transaction must be valued from the perspective of the entity receiving the
funds. Foley, 73 F.3d at 493. Regardless of the merits of Zwick's claim, the
Second Circuit has since abandoned that construction. See Santopietro, 166
F.3d at 93 ("[T]o the extent that Foley required the Government to plead and
prove that the transaction involved something of value to the governmental
entity that received the requisite amount of federal funds, that narrowing
construction of the statute must . . . be discarded."). Thus, Zwick's reliance on
Foley is misplaced.

20

Although the government argues in its brief that "it is difficult if not impossible,
to find acceptance of responsibility in Zwick's pretrial and trial conduct," see
Brief for Appellee at 53, we limit our discussion to whether Zwick satisfied
either subparagraph (1) or (2) of 3E1.1(b) because acceptance of responsibility
is not the element at issue in this appeal and we assume it will be satisfied even
after remand. In addition, we also assume that, even after remand, Zwick's
offense level will be at level 16 or greater as subsection (b) requires. Although
Zwick's offense level may change if the District Court determines on remand
that the judgment on the 666 counts is to be vacated, the offense level for the
fraud counts alone is 17, which satisfies the second requirement of 3E1.1(b)
that Zwick's offense level be 16 or higher.

21

The Probation Office, in its Presentence Investigative Report ("PSR") found:

The defendant entered a guilty plea to Counts 4, 5, 7, 8, 9, and 10 of the
indictment. Ostensibly, he chose to go to trial over the remaining counts of the
indictment, believing he should not have been charged with those offenses in
federal court, instead that he should have been charged in state court. During
the presentence interview, he admitted his conduct in all of the charged counts
was illegal. The government was, therefore, required to prepare for trial in this
matter. In view of this, only a two-point reduction for acceptance of
responsibility is warranted.
PSR para 75.

22

Specifically, the District Court noted that the defendant's opening statement
informed the jury that the government had to prove defendant's intent, and that
defendant cross-examined Tim Fosnight as to the defendant's voting activities
at a Ross Township Planning Commission hearing on the approval of a
conditional use permit for the Fosnights' project in an effort to require the
government to prove intent.

23

See United States v. Rogers, 129 F.3d 76, 80-81 (2d Cir. 1997) (finding that
conditional offer to plead guilty did not come early enough in the proceedings
to satisfy 3E1.1(b)(2) because it came after the case was "effectively tried" with
the motion to suppress); United States v. Gonzales, 19 F.3d 982, 983-84 (5th
Cir. 1994) (refusing to award an additional point because Gonzales never
entered an actual guilty plea; the suppression hearing to which Gonzales wished
to preserve a challenge in his guilty plea was the equivalent of a full trial,
requiring full preparation and expenditure of resources by the government and
the court).

24

See United States v. Morillo, 8 F.3d 864, 872 (1st Cir. 1993) ("A defendant
who withholds a guilty plea until he stands poised on the brink of trial has no

entitlement to the soothing unguent of section 3E1.1(b)(2). Therefore, the court

below acted appropriately in awarding appellant a two-level, rather than a
three-level, decrease for acceptance of responsibility"); Narramore, 36 F.3d at
846-47 (holding that defendant was not entitled to a reduction under 3E1.1(b)
(2) because he could have informed government of intention to plead guilty,
even though he was waiting to actually plead guilty until after the court ruled
on his motion to suppress); United States v. Villasenor-Cesar, 114 F.3d 970,
975 n.4 (9th Cir. 1997) ("Like Narramore, Villasenor-Cesar could have
preserved the availability of the subsection (b)(2) adjustment if, instead of
pursuing a stipulated-facts trial, he had notified authorities of his intent to plead
guilty if the district court ruled against him on his motion to dismiss the
indictment."); United States v. Covarrubias, 65 F.3d 1362, 1368 (7th Cir. 1995)
("Because defendant made no attempt to conserve government and district court
resources in his case prior to November 7, the district court did not clearly err in
denying him the additional reduction" when defendant did not plead guilty until
the day of trial, and did not inform the government that he would be pleading
guilty in the event that the motion to suppress, which was decided on the
morning of trial, was denied); United States v. Williams , 74 F.3d 654, 657 (5th
Cir. 1996) (agreeing with Covarrubias).
25

We also find that the fact that Zwick made legal arguments at trial is inapposite
with respect to 3E1.1(b). Application Note two provides that a defendant may
be entitled to a reduction even if he goes to trial, if he does so to "assert and
preserve issues that do not relate to factual guilt (e.g., to make a constitutional
challenge to a statute or a challenge to the applicability of a statute to his
conduct)." Although the note does not explicitly provide that it applies only to
3E1.1(a), a logical reading of the note compels this conclusion. The note
espouses the principle that a defendant may in some circumstances show
contrition even if he proceeds to trial; this has little to do with the timeliness of
a defendant's offer of information or expression of intent to plead guilty, the
focus of 3E1.1(b). See Villasenor-Cesar, 114 F.3d at 974. In addition, the note
is essentially a continuation of Application Note 1, which applies to subsection
(a).